%0 Journal Article
%T Sources of Synergy Realization in Mergers and Acquisitions: Empirical Evidence from Non-Serial Acquirers in Europe
%A Nancy Huyghebaert
%A Mathieu Luypaert
%J International Journal of Financial Research
%D 2013
%I 
%R 10.5430/ijfr.v4n2p49
%X We empirically investigate the sources, magnitude, and timing of synergy realization for 293 M&As by non-serial listed acquirers in Europe during 1997¨C2005. In contrast to much of the existing literature, we find that the shareholders of non-serial acquirers gain significantly upon deal announcement. Next, we unravel the various sources of M&A value creation, in particular operating synergies resulting either from revenue enhancement or from savings on operating costs and investments, and financial synergies. Compared to its non-combining industry peers, the median combined sample firm reports a 4.92% larger sales growth rate by the third post-deal year. Operating costs relative to sales are reduced by an extra 1.53% over this same window. In leverage-increasing acquisitions, the median combined firm realizes a persistent 6.09% rise in its long-term debt ratio. Finally, our multivariate regression results point out that non-serial acquirers with a larger market-to-book ratio achieve more extensive operating synergies.
%U http://www.sciedu.ca/journal/index.php/ijfr/article/view/2654